Google made changes to its search engine layout by removing right-hand side paid ads on desktop and allowing a fourth paid ad above organic results for commercial queries. It was predicted this would make top ad placements more important and competitive. However, the changes had minimal impact, with CPCs and organic listings remaining stable. The removal of right-hand ads created opportunities, with ad extensions seeing increased clicks below the fold and product listing ads dominating the right column. Top ads now drive more traffic, with position 4 seeing a large increase in clicks. Minimum bids for above-fold ads are cheaper while first-page bids are more expensive.

1. 1 Tom Gilmore
Background
The SEM & SEO world descended into chaos a short 3 months ago as the monolithic Google rolled
out a revision to a more streamlined search engine layout. The change involved abolishing Right
Hand Side paid ads on desktop and allowing the possibility for placement of a fourth paid search ad
above organic search results, for what Google defines as ‘highly commercial’ search queries. There
were two exceptions to the adjustment of the layout. Users would still be able to view Product
Listing Ads and information from the Knowledge Panel.
Details
Google has adapted to trends in traffic steering away from Right Hand paid search ads, with studies
demonstrating that only 14.6% of paid search traffic will land on Right Hand side ads and ads that
are below the fold.1
In addition, people are more likely to recognise Right Hand side ads as paid
advertisements. Eye tracking research has suggested that people can differentiate Right Hand side
ads as ads reliably, but are not as effective at distinguishing paid ads in the centre strip.2
Aside from raising revenue, another
reason Google is likely to have
rolled out this change is to create a
centred search experience
analogous to the success of centred
ads on mobile and tablet devices.
This change was introduced to
optimise ads for the rapid adoption
of mobile and tablet as the main
device for making search queries.
As of 2015, Google announced that
more search queries take place on
mobile than desktop in 10 of the
world’s OECD countries.3
This is not the first time Google has considered abolishing Right Hand side paid ads, having tested
how it affected search traffic in 2012.4
It is also likely that there will be many to come as Google
continues to review the search experience in response to dynamic technological and user
behavioural trends.
Predictions
It was predicted that the change would result in paid search ads becoming less eligible for visibility
since the majority of them will be placed below the fold as Right Hand side ads are abolished. Given
the fact that the 69.6% of search traffic clicks through on the top 4 ad positions5
, being above the
fold was hypothesised to become more important than ever. Ads below position 4 were predicted
1
https://searchenginewatch.com/2016/02/23/google-kills-right-hand-side-ads-what-does-this-mean-for-sem/
2 http://searchengineland.com/eye-tracking-study-everybody-looks-at-organic-listings-but-most-ignore-paid-ads-on-right-67698
3 http://searchengineland.com/its-official-google-says-more-searches-now-on-mobile-than-on-desktop-220369
4 http://techcrunch.com/2012/11/06/google-tests-new-navigation-lots-of-whitespace-no-sidebar-ads/
5
https://searchenginewatch.com/sew/study/2276184/no-1-position-in-google-gets-33-of-search-traffic-study

2. 2 Tom Gilmore
likely to see a drop off in CTR as impressions are still recorded despite traffic to these ads being
recorded.
The auction for these top positions was predicted to become more competitive, driving CPCs up for
the top 4 spots as competitors increase their bids. Despite the algorithm remaining stable, this
hypothetical rise in CPCs was postulated to cause a drop in quality score to advertisers below
position 5 due to a drop in CTRs. Ensuring the relevance of keywords and ad copy was postulated to
become increasingly crucial since Google has less spots to allow for competition, favouring keywords
with the highest quality score.
As organic search results had moved to being below the fold, it was predicted that there would be a
slight increase in the percentage of clicks coming through paid as opposed to organic. However,
since 78% of SERPs have less than 4 ads6
, this increase was determined to vary depending on the
relevant industry.
This change was also deemed to present an opportunity for ads that were listed on the Right Hand
side without callout extensions, sitelink extensions and location extensions. These ad extensions
would now be available for all ad copy in the paid search sphere.
3 Months Later
Despite the panic regarding CPCs and organic listings, the updated format seemed to have minimal
impact. Merkle/RKG have reported that daily non-brand desktop text ad CPCs on Google.com have
been running within about +/- 5% of their YTD average7
, with organic listings remaining stable.
6 https://searchenginewatch.com/2016/02/23/google-kills-right-hand-side-ads-what-does-this-mean-for-sem/
7 http://www.rimmkaufman.com/blog/googles-right-ads-removal-and-fourth-top-page-ad-deep-dive-data-two-
weeks/#.Vt7xuxiox9g.twitter

3. 3 Tom Gilmore
The streamlined SERP also had a number of unforeseen impacts. The predicted opportunity for ad
extensions was confirmed with CTRs skyrocketing (increasing up to 60%8
) for ads below the fold in
comparison to ads above. This phenomenon completely outweighed the hypothesized drop in
quality score for ads below the fold.
8 http://www.rimmkaufman.com/blog/googles-right-ads-removal-and-fourth-top-page-ad-deep-dive-data-two-
weeks/#.Vt7xuxiox9g.twitter

4. 4 Tom Gilmore
The removal of RHS ads has also created the opportunity for Product Listing Ads to dominate the
right column, being the only paid ad exempt from the change. PLA have accrued at least 3-5% more
clicks than standard text ads9
. Research has shown that Google appears to be showing PLAs more
frequently above the fold10
. This presents a potential opportunity for various FMCG and CPG clients
(that have eCommerce setup) to expand their presence on the SERP with Google Shopping.
As predicted, top of page ads are now driving more traffic, accounting for 80% of clicks (in
comparison to 70% before the chance). The most dramatic change to the ad positions was the
increase in clicks for position 4, now producing 8% of Google.com non-brand desktop text ad clicks,
up from around 0.5-1.0% in early February11
.
9 http://www.rimmkaufman.com/blog/googles-right-ads-removal-and-fourth-top-page-ad-deep-dive-data-two-
weeks/#.Vt7xuxiox9g.twitter
10 http://www.rimmkaufman.com/blog/googles-right-ads-removal-and-fourth-top-page-ad-deep-dive-data-two-
weeks/#.Vt7xuxiox9g.twitter
11 http://www.rimmkaufman.com/blog/googles-right-ads-removal-and-fourth-top-page-ad-deep-dive-data-two-
weeks/#.Vt7xuxiox9g.twitter

5. 5 Tom Gilmore
In terms of minimum bids, above the fold minimum bids have become cheaper whilst the first page
minimum bid has become more expensive. This confirms the postulation that ensuring your landing
page experience, ad copy relevance and click through rate are highly important in combating the
change for your client.

6. 6 Tom Gilmore
Next Steps
From a paid search perspective, it will be essential to conduct search query reports more frequently
to outline the consumer journey and ensure the correct keywords are triggering the right ads. It may
be beneficial to consider reducing the max CPC on expensive keywords and focusing on brand terms
given the recently more competitive market. It is also may be useful to work with SEO to optimise
search terms that are expensive in the auction.
Ad extensions will be of utmost importance with the refreshed search real estate, with callout
extensions, sitelink extensions and location extensions available to all ads now – especially
considering below the fold ads have attracted a higher proportion of clicks than before the change.
Google Shopping is a must for FMCG and CPG clients that have e-Commerce setup, as the last paid
ad appearing on the right hand side. RLSA and Customer Match are also going to be important
techniques in maintaining quality traffic, despite the top of page bid becoming cheaper. The reason
for this is that top of page bids may start to gain traction as other agencies respond to the changes
with more competitive strategies.
Moreover, it will be essential to reassess client’s business objectives. For example, if the relevant KPI
is to be on the first page, it may be beneficial to consider whether this is a reliable measure of
campaign success given that there are now less ad spots above the fold. The refreshed layout will
have a different effect for each business and it is essential that any revised strategy is tailored to
meet the clients’ specific business objectives.